We know that Google is the world’s most popular search engine: As of June 2021, it controls 92% of the global market. But how did the search giant become so dominant? Was it simply by offering the best product? Or has Google engaged in anticompetitive conduct to protect its turf from other tech companies? Government regulators all over the world have begun questioning Google’s business tactics, with some surprising results.
What is an antitrust case?
An antitrust case is an investigation and/or lawsuit aimed at uncovering unlawful business practices such as restraints, monopolies, and trusts. (A trust is a legal agreement between multiple companies that consolidates their power.)
In the United States, antitrust laws came about in the late 19th century as a response to the consolidation of several industries, such as the Standard Oil Company and the American Tobacco Company. These were mergers between successful companies that allowed them to fix prices and block competition, basically controlling entire industries to their benefit, and everyone else’s detriment.
The first antitrust law passed in the United States was the Sherman Antitrust Act of 1890, and President Theodore Roosevelt quickly became famous for “trust busting” in the name of consumer protection. The Sherman Act, in particular Section 2, which prohibits monopolies, is the same legislation used as the basis for the current Google antitrust case in the United States.
6 Google antitrust cases to know
As of June 2021, these are six of the highest-profile antitrust cases aimed at Google.
1. The United States of America v. Google
- Who: The original plaintiffs were the United States of America, acting under the Attorney General of the United States, plus the State Attorneys General of 11 U.S. states (Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas). Since the case was filed, 38 more states have joined the case, plus Puerto Rico, Guam, and Washington, D.C.
- When: The suit was filed in October 2020 and is ongoing.
- Why: The plaintiffs accused Google of creating unlawful monopolies (per Section 2 of the Sherman Act) in the areas of internet search, search advertising, and other types of advertising through a variety of “anticompetitive and exclusionary practices.” These include:
- Exclusionary agreements that ensure Google remains the default search engine on Apple and Android devices. The plaintiffs claim that these exclusionary agreements funnel almost 60% of all search queries straight to Google. (On mobile, that number goes up to 80%.) They say that nearly 50% of the remaining queries come from Google’s own properties, such as the Chrome web browser, leaving a paltry 10–20% of searches free of Google’s influence (of course, many of those queries go to Google as well).
- Exclusionary agreements with Android device manufacturers, carriers, and developers that use the Android operating system, requiring pre-installation of non-deletable Google apps and preventing competitors from using features like voice search.
- The sheer size of Google’s operation makes its SERP (search engine results page) ads much more valuable than competitors’, to the point where the suit refers to Google’s SERP ads as a “must have” in the digital advertising world. Because there are no “reasonable alternatives” to Google’s SERP ads, Google can fix prices. Google Search’s scale also allows its algorithms to develop in ways that smaller search engines just can’t compete with, the plaintiffs argue.
- What happened: As of June 7, 2021, this case is ongoing. In the latest status report, from May 2021, the plaintiffs claimed that Google was “improperly withholding communications” between itself and third-party subpoena recipients and refusing to provide employee performance reviews requested by the court.
2. Decision 21-D-11 “relating to practices implemented in the Internet advertising sector”
- Who: Autorité de la concurrence (the French Competition Authority)
- When: The investigation launched in 2019 and a final decision was reached in June 2021.
- Why: The suit claimed that Google Ad Manager and Google AdX, tools for managing advertising auctions, shared data across services to squash competition from other advertising platforms.
- What happened: On June 6, 2021, the French authority decided that Google should be fined €220 million. For the next three years, an independent monitor will oversee Google as it modifies its AdX service to be more competition-friendly. Changes are expected to go into effect in the first quarter of 2022.
3. European Commission Case 40411: Google Search (AdSense)
- Who: The European Commission
- When: Court proceedings began July 2016 and a final decision was reached in March 2019.
- Why: The Commission found that, for more than 10 years, Google included restrictive clauses in its contracts with publishers (sites that serve ads) that gave Google’s ads premium placement on publishers’ SERPs. Additionally, Google required publishers to get written approval before making any changes to the way they displayed competitors’ ads.
- What happened: Google stopped its illegal practices a few months after the Commission released their Statement of Objections in July 2016. In March 2019, the Commission fined Google €1.49 billion for violating antitrust laws.
4. European Commission Case 40099: Google Android
- Who: The European Commission
- When: The investigation began in March 2013 and a final decision was reached in July 2018
- Why: The Commission found that, since 2011, Google had placed restrictions on Android manufacturers and carriers to funnel search traffic to Google’s search engine. These are some of the same claims being made in the ongoing United States Department of Justice case.
- What happened: The Commission fined Google €4.34 billion.
5. European Commission Case 39740: Google Search (Shopping)
- Who: The European Commission
- When: The investigation began in November 2010 and a final decision was reached in June 2017.
- Why: Starting in 2008, Google began to promote Google Product Search (now Google Shopping), a vertical search engine, by displaying Google Product Search results at the top of its general SERP, effectively using its dominance of the general search engine market to give Google Shopping an illegal advantage over competitors.
- What happened: The Commission fined Google €2.42 billion for promoting its own shopping service through its search engine.
6. FTC File Number 111-0163: In the Matter of Google Inc.
- Who: The United States Federal Trade Commission
- When: The investigation began in October 2011 and a final decision was reached in January 2013.
- Why: This investigation focused on the way Google ranked search results to highlight its own services—the same issue as European Commission Case 39740 above. The FTC investigated whether Google’s practices may have violated Section 2 and Section 5 of the Sherman Act.
- What happened: Unlike the European Commission, the Federal Trade Commission found that Google had not violated antitrust law by using its search engine to promote its own products. The FTC did acknowledge that some of Google’s practices were problematic, such as misuse of patents and lifting content from other sites to display it directly on the SERP. (For example, Google displayed Yelp reviews on its SERP, then threatened to remove Yelp from the SERP entirely when Yelp pushed back.) As part of the settlement, Google agreed to allow competitors to access some of its patents, to give online advertisers more flexibility with the AdWords platform, and to stop poaching content from other vertical search engines to use in its own vertical offerings.
What is a monopoly—and is it legal?
According to Merriam-Webster, a monopoly is “exclusive ownership through legal privilege, command of supply, or concerted action.” In both the U.S. and the EU, market dominance—sometimes called a natural monopoly or de facto monopoly—is not illegal. But using your dominant position to restrict competition is illegal.
The central question of the Google antitrust cases in both the U.S. and Europe isn’t whether Google’s dominance constitutes de facto monopoly power over search (with 92% of the global market share, it’s pretty clear that it does) but whether it is actively using its control of the market to stifle competitors.
The future of big tech
The fines levied against Google in these antitrust cases may seem hefty, but they’re actually quite small compared to Google’s revenue. The most recent fine, €220 million (about $268 million) from the French competition authority, is equal to about 0.18% of the tech giant’s yearly revenue. So, do these antitrust lawsuits actually make any difference at all?
Yes—somewhat. As a result of the French decision, Google has promised to make changes to its advertising policies, and although these changes technically only need to happen in France, Google has said it will apply some changes internationally. This may open up the field of online advertising.
In the U.S., some states are responding with brand-new legislation. Several states have introduced new bills aimed at reducing the control that two companies—Google and Apple—hold over the smartphone industry. These bills, if passed, may prevent Google and Apple from forcing app developers to use their payment systems, which lets each provider take a cut. Arizona already passed one such bill.
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